July 31, 2009

Monsoon rains in July have accelerated sowing of summer-sown oilseeds in key Indian states, boosting prospects of a good crop, but rains in next two months would be crucial for output, a senior trade official said.

Solvent Extractors' Association of India executive director B.V. Mehta said output of soy, the main oilseed crop, may touch 9 million tonnes in the year ending September 2010, if rains are normal in August and September.

As per trade estimates, India has harvested 8.2-8.5 million tonnes of soy in the current year ending September 2009. The government will issue a final output figure in September.

Rains from June 1 to July 1 was 46-percent below normal, stalling sowings, but improved in July, trimming rain deficit to 19 percent by July 22, weather department data showed.

Soy crop matures in 90-105 days, depending on the variety, and arrivals start from early October.

India, the world's second biggest vegetable oil importer, may import about 8 million tonnes in the year ending October 2010, same as expected imports in the current year, provided prices do not climb sharply, squeezing demand, Mehta said.

Imports in the year ended September 2008 stood at 6.3 million tonnes.

He said that if prices remain bearish, it is expected that similar level of imports of about 8 million tonnes in 2009-10 assuming similar level of oilseeds output is reached.

Imports rose this year after edible oil prices fell sharply in the international markets and India scrapped import duty on crude edible oils like soyoil and palm oil in March last year.

Trade is now anticipating the government to re-impose duty in September, ahead of crushing season in October, as prices are lower in the domestic market, which could hurt farmers.